The problem of product obsolescence — and what the ATM industry is doing about it
Most appliance repair people these days will tell you that the average lifespan of a large appliance of almost any description, make or model is about eight years.
Worse, the cost of appliance parts and repairs today can easily set you back more than half the cost of a new machine. And with the clock ticking on the other components of your 8-year-old model, the economics of repair get really dismal really fast.
That's why, for years, I fixed my own large appliances when they broke down — until a catastrophe with a clothes dryer whose motor I was replacing sent me to the emergency room for four hours and 16 stitches. My husband pointed out that the bill for that side trip would have paid for a new dryer.
So, last week, when the ball bearings in our eight-year-old washing machine started making a noise during the spin cycle that sounded like an Airbus taking off in the basement, I reluctantly started shopping — not for parts, but for a new machine.
You can rage, rage against the dying of a machine that still looks almost new, but has chewed-up ball bearings and a computerized display that's starting to hiccup occasionally. Or you can go gently into that good Big Box nearby and pay for a new one.
Assuming the normal life expectancy for myself and my appliances, I'll probably go through a half-dozen or so washing machines before my laundry-cursing days are done.
That's depressing — not only because of the economics (and mountains of laundry) involved, but also because of the waste.
If you're an ATM deployer, whether bank or IAD, you're looking at a similar situation — but on a much larger scale accompanied by much larger dollar signs — when you consider the expected life of your fleet.
The general rule of thumb for a bank ATM is (surprise) about eight years. An IAD might squeeze a few more years from a more basic machine, depending on siting and user traffic.
In a 2016 blog, Daryl Cornell, CEO of ATM-maker Triton, wrote that U.S. ATM deployers ultimately might discard as many as 200,000 ATMs in the process of migrating their fleets to EMV, in most cases because the cost of upgrading is more than the ATM is worth.
In recent years, banks have faced an accelerated rush to ATM obsolescence brought on by the sunsetting of Windows XP. The looming end of support in 2020 for its successor operating system, Windows 7, will send another load of obsolete ATMs to the dump as financial institutions migrate to Windows 10.
Plus, there's the constant competitive pressure for banks to upgrade machines in order to push out ever more amazing features that help to reinforce customer relationships and loyalty.
The bottom line is that every eight years or so, we could be looking at the disposal of 3 million or so ATMs worldwide.
There are two ways for the industry to respond to this situation:
The first way is to limit, to the greatest degree possible, the onboard ATM components that contribute to obsolescence.
NCR Corp. showed how this might be accomplished with the Kalpana thin-client ATM. Its design removes the software stack from the ATM hard drive to a remote server, greatly reducing the issue of hard drive capacity that comes with every new OS upgrade.
The ATMIA next-gen project has convened a cross-industry consortium of more than 100 members to develop a non-Microsoft ATM operating system that could offer the same ability to limit on-board computation, with reliance on a remote server.
Diebold Nixdorf jettisoned peripherals with its small-footprint Essence touch screen ATM concept, which has neither a PIN pad, card reader or receipt printer. Card access is enabled via NFC technology, PIN entry is on screen, and a digital record of the transaction is sent to the user's email address or mobile number.
An even more minimalist Diebold concept does away with a screen as well, reduced more or less to a cash vault with a dispenser and a biometric iris-scanner for user authentication. It utilizes the NFC-enabled smartphone in the user's hand as contactless card reader, display, keyboard and QR code-based transaction verifier.
On the plus side, these and other innovations could greatly reduce the materials needed to manufacture an ATM — and the problem of how to dispose of them when the machine reaches the end of its life-cycle.
On the minus side, it could be decades before we see the widespread implementation of any of them.
Until then, the best option for the industry is reuse and recycling. In a recent blog, Mark Smith, Director Of Business Development at MVP Financial Equipment Corp., described the benefits of ATM recycling and refurbishment — for both the environment and the buyer of the refurb, which generally costs 60 percent less than a new machine.
Through a qualified refurbishment company, certified technicians repurpose important ATM components. Mainboards, cash dispensers, displays, cabinets and more are carefully disassembled, cleaned, repaired or rebuilt from the inside out, repainted and tested to ensure they are working properly.
Parts that cannot be used again, such as batteries, are properly disposed of to reduce unnecessary waste that can become a hazard to the environment.
Next time you're looking to replace an old machine with a newer one, be sure to ask the vendor whether they accept trade-ins for refurbishment or recycling. Steadily growing numbers of companies in all industries are joining this important effort.
The company I bought our new washing machine from is one of them. So, on Friday, the Airbus wannabe in the basement will be replaced and hauled away to begin its journey to the refurb market. The matching eight-year-old dryer will follow when it breaks down. I'm pretty sure my husband will insist on it.
Happy Earth Day
Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally. She is now the editor of ATMmarketplace.com and WorldofMoney.comwww